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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Endeavour Mining Corporation (TSE:EDV), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Endeavour Mining Insider Transactions Over The Last Year
Independent Non-Executive Director Naguib Onssy Sawiris made the biggest insider purchase in the last 12 months. That single transaction was for CA$13m worth of shares at a price of CA$20.00 each. That means that an insider was happy to buy shares at above the current price of CA$19.80. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 1.4m shares worth CA$27m. On the other hand they divested 68200 shares, for CA$1.5m. Overall, Endeavour Mining insiders were net buyers last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Endeavour Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Endeavour Mining Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Endeavour Mining, over the last three months. We can see that Naguib Onssy Sawiris paid US$13m for shares in the company. On the other hand, insiders netted US$799k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Insider Ownership of Endeavour Mining
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Endeavour Mining insiders own 31% of the company, currently worth about CA$684m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Endeavour Mining Insiders?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Endeavour Mining. Looks promising! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Endeavour Mining.
Of course Endeavour Mining may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.